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Shares of the Palo Alto, California-based electric-car maker soared 87 percent this year through Thursday, dramatically outperforming the benchmark S&P 500, after the manufacturer impressed Wall Street with its ability to navigate the upheaval of the COVID-19 pandemic. Tesla’s market capitalization was about $140 billion before a sell-off on Friday.
“Tesla stock price is too high,” tweeted Musk, who has an option to buy 1.69 million shares at $350.02 apiece if the company's market capitalization maintains a 6-month average above $100 billion. Doing so would give Musk a paper profit of about $590 million at Friday's price near $700 a share.
Some Wall Street analysts, like Dan Ives of Wedbush Securities, agree with Musk that Tesla shares are overvalued in the near-term.
In a note to clients following Tesla's quarterly earnings report on Wednesday, Ives raised his 12-month price target to $600 a share due to results being "better than feared."
But others like Oppenheimer's Colin Rusch say shares aren't high enough. He raised his price target to $968 apiece due to Tesla's "ability to disrupt the auto market" and its cheap valuation.
Tesla reported a surprise adjusted profit of $1.24 a share in the three months through March, easily beating the 36-cent loss that was expected. The company earned $16 million on a net basis.
It delivered 88,400 vehicles in the three months through March, a record for the first quarter, despite disruptions at factories in Shanghai and Fremont, California.